ROLLOVER IRA?

[TAXMAN]

Husband was taking RMD from IRA. He died spouse inherited. Spouse gets money in her hands. Takes it to another bank and puts it back into an ira for her and then takes her RMD from it. 1099r shows total distribution from Husband with code 4. MY thinking and reading is this is still ok? Thus no tax on the full distribution

[Abby Normal]

Inherited from spouse. If a traditional IRA is inherited from a spouse, the surviving spouse generally has the following three choices:

1. Treat it as his or her own IRA by designating himself or herself as the account owner.
    
2. Treat it as his or her own by rolling it over into a traditional IRA, or to the extent it is taxable, into a:
   a. Qualified employer plan,
   b. Qualified employee annuity plan (section 403(a) plan),
   c. Tax-sheltered annuity plan (section 403(b) plan),
   d. Deferred compensation plan of a state or local government (section 457(b) plan), or
    
3. Treat himself or herself as the beneficiary rather than treating the IRA as his or her own.

If a surviving spouse receives a distribution from his or her deceased spouse's IRA, it can be rolled over into an IRA of the surviving spouse within the 60-day time limit, as long as the distribution is not a required distribution, even if the surviving spouse is not the sole beneficiary of his or her deceased spouse's IRA.

https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Beneficiary

 

[Abby Normal]

Now you may have an RMD issue if husband did not take his RMD before dying. I encourage my clients to take the RMD early in the year.